Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/182456
Authors: 
Andonov, Aleksandar
Kräussl, Roman
Rauh, Joshua
Year of Publication: 
2018
Series/Report no.: 
CFS Working Paper Series 599
Abstract: 
We investigate the characteristics of infrastructure as an asset class from an investment perspective of a limited partner. While non U.S. institutional investors gain exposure to infrastructure assets through a mix of direct investments and private fund vehicles, U.S. investors predominantly invest in infrastructure through private funds. We find that the stream of cash flows delivered by private infrastructure funds to institutional investors is very similar to that delivered by other types of private equity, as reflected by the frequency and amounts of net cash flows. U.S. public pension funds perform worse than other institutional investors in their infrastructure fund investments, although they are exposed to underlying deals with very similar project stage, concession terms, ownership structure, industry, and geographical location. By selecting funds that invest in projects with poor financial performance, U.S. public pension funds have created an implicit subsidy to infrastructure as an asset class, which we estimate within the range of $730 million to $3.16 billion per year depending on the benchmark.
Subjects: 
Infrastructure
Public pension funds
Institutional investors
JEL: 
G11
G23
G28
H54
H75
Document Type: 
Working Paper
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